[Federal Register Volume 69, Number 65 (Monday, April 5, 2004)]
[Pages 17721-17722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-7604]



[Release No. 35-27825]

Filings Under the Public Utility Holding Company Act of 1935, as 
Amended (``Act'')

March 30, 2004.
    Notice is hereby given that the following filing(s) has/have been 
made with the Commission under provisions of the Act and rules 
promulgated under the Act. All interested persons are referred to the 
application(s) and/or declaration(s) for complete statements of the 
proposed transaction(s) summarized below. The application(s) and/or 
declaration(s) and any amendment(s) is/are available for public 
inspection through the Commission's Branch of Public Reference.
    Interested persons wishing to comment or request a hearing on the 
application(s) and/or declaration(s) should submit their views in 
writing by April 20, 2004, to the Secretary, Securities and Exchange 
Commission, Washington, DC 20549-0609, and serve a copy on the relevant 
applicant(s) and/or declarant(s) at the address(es) specified below. 
Proof of service (by affidavit or, in the case of an attorney at law, 
by certificate) should be filed with the request. Any request for 
hearing should identify specifically the issues of facts or law that 
are disputed. A person who so requests will be notified of any hearing, 
if ordered, and will receive a copy of any notice or order issued in 
the matter. After April 20, 2004, the application(s) and/or 
declaration(s), as filed or as amended, may be granted and/or permitted 
to become effective.

Pepco Holdings, Inc., et al (70-10217)

    Pepco Holdings, Inc. (``Pepco''), a registered holding company, 701 
Ninth Street, 10th Floor, Suite 1300, Washington, DC 20068, Conectiv, a 
registered holding company and subsidiary of Pepco, and Atlantic City 
Electric Company (``ACE''), a public utility company and direct 
subsidiary of Conectiv, both of 800 King Street, Wilmington, Delaware 
19899 (collectively ``Applicants''), have filed an application-
declaration (``Application'') under section 12(d) of the Act and rules 
44 and 54 under the Act.
    Applicants seek authority for ACE to sell distribution facilities 
owned by ACE that operate at 14kV and lower voltages within the city 
limits of Vineland, New Jersey (``Vineland''). Vineland, through a 
municipally-owned utility known as the Vineland Municipal Electric 
Utility (``VMEU''), provides distribution services to approximately 
two-thirds of the residences and businesses operating within the city 
limits. ACE provides distribution services to the remaining customers, 
about 5,500 customers. If the sale is approved, substantially all 
customers within the city limits will be served by VMEU. ACE will 
retain its higher-voltage transmission facilities both within and 
outside the city limits, which are used to deliver bulk supplies of 
electricity throughout southern New Jersey, including to VMEU. In 
addition, ACE will retain some lower voltage facilities that will be 
located within and pass through Vineland but will not interconnect with 
the current or to-be-transferred VMEU facilities.
    The specific utility distribution assets to be sold have a 
depreciated book value

[[Page 17722]]

of approximately $9.1 million (as of year end 2001) and include 
approximately 4,300 poles, less than 800 miles of primary and secondary 
wires attached to those poles, approximately 2,400 pad-mounted and 
pole-mounted transformers, street lights, underground conduit, customer 
service lines, and customer meters. Applicants state that detailed 
field inventory work is being done to identify the exact figures of the 
various types of assets to be transferred. Also being sold or 
transferred incidental to the sales transaction are accounts receivable 
from the transferred customers, various pole attachment agreements with 
third parties who have equipment attached to the transferred poles, 
easements and rights of way, and approximately 11 acres of unimproved 
    The total consideration for the transaction is $23.9 million, of 
which $9.1 million was the approximate net book value as of year-end 
2001 of the assets to be transferred. Applicants are in the process of 
determining additions, prior retirements and post 2001 depreciation. A 
significant, but not specifically quantified, portion of the 
consideration is for the loss of future income from the customers being 
    The transaction is proposed following a condemnation action 
initiated by Vineland in a New Jersey state court. Various pleadings 
were filed by the city and ACE in which expert testimony was offered by 
both parties on the value of what was sought to be condemned based on a 
variety of valuation methods, including depreciated book value of the 
assets, replacement costs of the assets, the present value analyses of 
the future stream of income from the transferred customers, and other 
considerations. A settlement of the condemnation action was negotiated 
and executed on March 13, 2002. The settlement provided for the sale of 
assets and transfer of the customers from ACE to VMEU, effective as of 
a condemnation date to be selected. Between March 13, 2002, and the 
present, ACE has been constructing the facilities necessary to 
reconfigure its system and doing other work necessary to permit a 
smooth transition of customer records, customer billing and similar 
    Under the transition plan, customers are being transferred to VMEU 
in advance of the transfer of title to the utility assets. Under the 
settlement agreement and the transition plan, Vineland has made 
payments to ACE totaling $12.4 million and is expected to make an 
additional payment of $11 million sometime in April 2004. Title to the 
utility assets has not been transferred but is expected to be 
transferred in early June 2004. A final payment of approximately 
$500,000 will be made six months after the transfer date.

    For the Commission, by the Division of Investment Management, 
pursuant to delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 04-7604 Filed 4-2-04; 8:45 am]